{"id":102067,"date":"2025-03-26T00:00:00","date_gmt":"2025-03-26T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/capital-economics-sees-the-uaes-gdp-growing-to-4-5-in-2025\/"},"modified":"2025-03-26T00:00:00","modified_gmt":"2025-03-26T00:00:00","slug":"capital-economics-sees-the-uaes-gdp-growing-to-4-5-in-2025","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2025\/03\/26\/capital-economics-sees-the-uaes-gdp-growing-to-4-5-in-2025\/","title":{"rendered":"Capital Economics sees the UAE\u2019s GDP growing to 4.5% in 2025"},"content":{"rendered":"

Capital Economics sees the UAE retaining its position as the fastest <\/strong>growing <\/strong>economy in the Gulf in 2025,<\/strong> expecting GDP growth to accelerate to 4.5% this year \u2014 up from 4.0% in 2024, Capital Economics\u2019 James Swanston, Middle East and North Africa economist said in a research note seen by EnterpriseAM UAE. GDP growth will be driven by \u201ca combination of stronger oil output and a thriving non-oil economy,\u201d Swanston wrote.<\/p>\n

On the oil front,<\/strong> the UAE is expected to be the \u201cmajor beneficiary\u201d of Opec+\u2019s decision to raise oil output starting 1 April, as it will allow the country to \u201ctake advantage of its twice-raised base quota.\u201d This is expected to raise production by 7.0% to 3.1 mn bpd by the end of 2025, boosting oil GDP by the end of the year. The UAE had kept production levels unchanged at around 2.9 mn barrels a day over the first couple of months of the year, which is expected to weigh on oil GDP growth in 1Q 2025. <\/p>\n

REMEMBER-<\/strong> The UAE is set to see a higher production quota of 3.5 mn barrels per day in 2025, up from the current 2.9 mn, after the oil cartel agreed to raise its production quota last year<\/a>.<\/p>\n

The UAE\u2019s non-oil economy is exp<\/strong>ected to experience some \u201cheadwinds\u201d due to a tighter monetary policy<\/strong>, a situation expected to last over the next couple of years \u2014 thereby potentially slowing down business activity. However, credit demand in the UAE \u201cremains solid,\u201d while fiscal policy is expected to remain supportive due to the UAE\u2019s strong budget surplus, which is expected to remain solid despite lower prices. This, coupled with expectations of a strong performance in the tourism, retail trade, and real estate sectors is expected to keep non-oil activity solid throughout the year.<\/p>\n

Inflation may have already peaked:<\/strong> The agency sees inflation slowing to 1.5% this year, down from 1.8% in 2024, which will \u201csoften the pinch on household incomes,\u201d according to the note.<\/p>\n

How CE\u2019s growth projection compares to others:<\/strong> The forecast is on the optimistic end of the spectrum, only a couple of percentage points below that of the Central Bank of the UAE (CBUAE), which it upgraded to 4.7%<\/a> earlier this month. <\/a>S&P Global<\/a> and Fitch Solutions\u2019<\/a> research unit BMI are the most optimistic of the bunch, expecting the UAE\u2019s real GDP to grow by 5.1% this year. On the lower end, the International Monetary Fund<\/a> and the World Bank<\/a> revised their forecasts for the UAE\u2019s economy this year to 4.0%.<\/p>\n

ALSO- S&P Global Market Intelligence sees the UAE\u2019s non-<\/strong>oil economy growing 5.2% t<\/strong>his year<\/strong>, driven by strong performances from the tourism, real estate, and finance sectors, among others, S&P Global Head of Middle East and Northern Africa Economics Ralf Wiegert told Khaleej Times<\/a>. \u201cReal estate will likely continue to grow and remain one of the key growth drivers in 2025. We haven\u2019t seen signals that would point to an imminent downturn of the market, which leads us to anticipate further growth of Dubai's and, to a lesser extent, UAE's real estate market in 2025,\u201d Wiegert is quoted as saying.<\/p>\n

This would represent a slight slowdown from last year<\/strong>, when the UAE\u2019s non-oil GDP grew by 5.4%. However, this is still a less significant slowdown than others are predicting, with both credit ratings agency Moody\u2019s<\/a> and Emirates NBD<\/a> predicting non-oil growth slowing to 5.0% in 2025, while the Central Bank of the UAE (CBUAE) expects non-oil GDP to come in at 5.1% this year. <\/p>\n","protected":false},"excerpt":{"rendered":"

Growth will be driven by \u201ca combination of stronger oil output and a thriving non-oil economy\u201d<\/p>\n","protected":false},"author":1,"featured_media":102068,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1557],"tags":[7,20,25],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-102067","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment-watch","tag-enterpriseam-uae","tag-gdp","tag-investment-watch","wpautop","entry"],"acf":{"mongo_id":"35178f39-194f-4460-aa15-bf19a2c8968e","order":"4","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/3\/2063.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Capital Economics sees the UAE\u2019s GDP growing to 4.5% in 2025","related_issue":[102060],"teaser":"Growth will be driven by \u201ca combination of stronger oil output and a thriving non-oil economy\u201d","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/3\/.a6b5853b-111c-47c8-ac58-8355785fc58f.mp3"},"yoast_head":"\nCapital Economics sees the UAE\u2019s GDP growing to 4.5% in 2025 - 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